Gunselman continues to lie, prosecutors say

Even after promising to cooperate with federal prosecutors, the head of a defunct Lubbock biodiesel firm allegedly has continued to make false statements about his company’s assets and tried to obstruct the 16-month-old investigation.

A motion filed Friday asking U.S. District Judge Sam R. Cummings to revoke a San Antonio magistrate’s order freeing Jeffrey David Gunselman on a $100,000 personal recognizance bond offers several examples of his continuing to make false statements Absolute Fuels’ processing plants were producing biodiesel.

Gunselman agreed to help federal agents identify and recover assets bought with about $40 million in funds prosecutors said actually came from the sales of renewable energy credits lacking real biodiesel.

Federal officials acknowledge in court records Gunselman helped them recover about $15 million in assets.

And, documents state, Gunselman lived up to his end of the agreement for several months.

Then, it said, he took trips to Washington D.C. and to Boston without telling federal officials where he was going. In one case, he provided his travel itinerary — which he was supposed to present as he got permission for the trip — two months after the trip.

As part of that cooperation, court records show, Gunselman was allowed to participate in efforts to sell off Absolute Fuels’ processing plants.

However, court documents describe two incidents this year where Gunselman made one or more false statements to potential buyers:

■ In February, Gunselman allegedly told a potential buyer of his Anton processing plant — bought in January 2010 for about $750,000 — the plant’s value was $30 million based on production. The buyer later determined in due diligence the plant could not produce biodiesel.

■ Between March and mid-July 2012, Gunselman allegedly failed to share letters of intent and other documents with the government regarding a potential offer to buy biodiesel plants and other remaining assets of Absolute Fuels for as much as $24 million.

Secret Service Agent Michael Fiveash, the main contact between Gunselman and federal law enforcement officials, wrote in an affidavit submitted in court Friday, “(Gunselman) bases the value of the plants by using false production figures. None of the plants ever produced any biodiesel fuel, so they have no value.”

The company’s plant manager, Bill Dommermuth, came to Anton to inspect the facility and concluded the facility was not capable of production.

In reviewing the plant’s plans and engineering diagrams, the affidavit says, Dommermuth determined there was no fire suppression system or spill containment system, and the electrical wiring failed to meet specifications.

The affidavit also says Gunselman told Dommermuth the plant had an Environmental Protection Agency permit to extrude some waste from the process out of the building through a pipe and into the ground.

Fiveash stated investigators have found no such permit and noted the EPA would not permit that kind of waste process.

In addition, Gunselman told Dommermuth his production head at Anton, Johnny Porras, had biodiesel production experience at another plant. However, federal agents say Porras told them he had no training in making biodiesel. In addition, the affidavit says, Gunselman was aware that Porras had produced no usable biodiesel for Absolute Fuels.

Pure Energy deal

Fiveash said in his affidavit he’d spoken in April with a plant broker who was representing another energy company, Pure Energy. Gunselman confirmed the talks and said he’d provided letters of intent to purchase the assets to his attorneys.

But in June, the plant broker told Fiveash while Pure Energy was interested in buying Absolute Fuels’ assets, no letters of intent had been drafted.

On July 13, the broker told Fiveash they were interested in negotiating, and that Pure Energy had given Gunselman letters of intent for the talks.

Two days later, Fiveash said, he received an e-mail from Pure Energy’s CEO, Irshad Ahmed, expressing disappointment that “none of our correspondence we sent since early this year had ever reached your desk.” The affidavit notes that correspondence dated to March 2012.

Arrested at the back door

According to Fiveash’s affidavit, negotiations reached a point where a July 23 deadline had been set to resolve the case.

But, the Secret Service agent said that sometime between July 3 and July 16, Gunselman “was not communicating with his attorneys,” and was not telling anyone about his location or travel plans.

On July 16, his San Antonio attorneys, Van Hilley and the Goldstein Law Firm, advised federal prosecutors they were withdrawing from the case.

An arrest warrant was issued July 17.

Two days later, agents from the Secret Service and Environmental Protection Agency’s criminal investigation division found Gunselman at the house he’d bought from baseball pitcher Josh Beckett in Boerne.

Fiveash noted that Gunselman didn’t answer the ringing door bell or respond to agents making “‘verbal announcements” or knocking on different doors and windows.

The arrest came as Gunselman was leaving the house through a back patio door, talking on his cellphone, the affidavit states.

Possible Swiss connection

Jacobo’s pleading states agents are investigating the possibility that Gunselman may have made financial arrangements in Switzerland during a July 2011 trip.

Fiveash’s affidavit cites an email exchange started with Gunselman, requesting a meeting in Switzerland with an official of the UBS global financial services company.

The affidavit also states investigators have determined Gunselman went to Switzerland “with heavy bags which may have contained large amounts of money,” adding that when he returned “the bags were noted as exceedingly light.”